Edmunds vs. NADA: Clunkers Cost Taxpayers

" Just how much -- the cash for clunkers program cost the American taxpayers. Now the program is history we're getting two very different estimates -- comes from Jeremy and -- in CEO -- dot com and the other from wholesale. Chief economist at the National Automobile Dealers Association good morning gentlemen good to -- about. Good morning. Jeremy -- numbers are pretty shocking and the White House is not happy about them you're suggesting it cost us. Over 20000. Dollars per vehicle to catch the Clinton spoke hike -- those."

" Well actually at a a pretty nice analysis our team we've got a team of thirty analysts six of them -- Ph.D.s. So this is not our first rodeo we do this stuff all the time. And they I think what they did a very novel they took the sales that were -- all year basically build some relationships between the different segments segments that participated in cash for clunkers and segments that didn't. And found that they were able to extrapolate -- would've happened if we didn't have the program and a simple map from there."

" Paul you set a completely different story what it costs for taxpayer and why do you believe Jeremy is completely off base."

" Well we think it's about 4600 dollars what is happening that we believe in in their scenario is that there. I'd give back in the rest of the year almost completely offset the additional sales that were made in the cash for clunkers period. So what does that mean -- Well it it it's it's simply means that to you seldom in July and August than in and then you did not sell in the rest of the year. What we seem to be doing is going back to pace. That we think would have existed in. July and August without cash for clunkers which is. Writer and 800000 pace for the last two months -- seven or 9000 units. So what -- so very estimate of what would have happened. In the event of cash for clunkers. Is. Is that correct either. That's not playing now. Sales are weaker. Than their suggesting. --"

" Well that's actually the point has a couple things that I think people miss one of them is that the president actually preannounce. Cash for clunkers like it was back in March and so what actually happened is that tune may sales even. We're lower than they would have been if the program hadn't been announced and people were logically delaying a purchase so when you start talking about the sales pace -- for clockers. We were actually in a recovery mode before the program was launched. Then that suppress sales obviously sales boomed during the program. And that we are going through a payback period. And frankly it's not just may actually had Jared Bernstein last week as one of the top economists that the White House was sort of damage control -- needs -- you know. -- might be right maybe a payback is 36 even twelve months. But his argument was that sales in August were somehow more valuable than sales in September and I don't know how you actually rationalize that at least is trying to shift the debate."

" Yeah the white yeah go ahead at Paul if you look at a lot of other studies that. Payback period for typical incentive programs conscripts at least over to three years so. That doing that in a couple of months -- fairly extreme."

" the White House is not very happy about. What the numbers that you've come up with you know that they've written about it on blogs to say you're getting it wrong once again. They actually suggested an essence your meeting you've got an issue to pick with -- patent issue on -- cash for -- program from day one. How do you respond."

" I -- I'm baffled we're here in Santa Monica we're about as far away from the politics as Washington is you can get. We -- we have an agenda is that we think that consumers who have good information can make better decisions and frankly I think politicians are in the same situation if there's good information out there. Politicians who are making some really key decisions today can only make better decisions that were frankly going to keep publishing even if it makes people empowers a little uncomfortable."

" Paul look ahead what does this mean for the rest of the year with cash for -- a good idea or a lousy idea."

" It's a good idea. It would have been greatly improved if we walked in with about eighty days' supply instead of about fifteen days' supply. We will win in the September was about 56%. Of the inventory we had last year. So really the what you see in October is missile sales that didn't occur in September in part because the inventories simply wasn't that the dealership. After cash for clunkers exhausted. Some of that of course result from the fact that. The government is involved in the production and plant closings and all of that so there's actually issue it's -- shortages of some new cars. Of course because the sales paces down. Tremendous shortage of used cars were about five million data it's not the clunkers that were put out of commission. Less than -- but that the -- five million that didn't coming in trade in. Gentlemen thank you very much -- teen we can't take a quick -- that will be."